“Everyone, from the government to consumers to the industry is seeking greater clarity,” Michael Harris, head of corporate development at Swyftx, a digital asset exchange based out of Brisbane, said.
“This is extremely positive, it represents such a recognition that this asset class is heading mainstream.”
Tax queries handballed
Mr Harris, whose exchange serves about 480,000 Australian customers, says it’s important to have rules around how assets are held, but points out that restricting the global nature of digital assets and their transnational movements to an onshore-custody only model could prove a hindrance in Australia’s development.
Although Treasury agreed in principle with many of the recommendations, including a look at decentralised autonomous organisations, or DAOs, which are a type of software-enabled corporation, it handballed queries around taxation to the Board of Tax.
As it stands, many digital asset transactions take place several steps away from a crypto-to-fiat-currency trade, with the tax treatment unclear.
“The devil is always in the details when it comes to tax, and a clear understanding of how DeFi, smart contracts and blockchain technology works will be essential for anyone seeking to amend our tax laws,” Michael Bacina, a partner at PiperAlderman, said.
He pointed out that several Australian bitcoin miners, those who contribute to maintaining global blockchains by solving complex algorithms, will miss out on a recommended 10 per cent tax break if they source power from renewable power sources.
“The economics of using renewable energy with crypto-mining is already compelling,” Mr Bacina said.
“I would have liked to have seen the renewables tax break to have been accepted.”
Ms White, whose clients often include large venture capital and family office investors, said their focus was on the value of businesses, which would be materially enhanced once there were clear regulations.
“Having a proper policy discourse for the industry is really very positive, and that the government is focusing on the licensing and custody regimes are no-brainers for a win-win situation,” she said.